New Yorkers take their risks on the rocks

08 Mar 2018

Americas

Charles Hecker

New Yorkers take their risks on the rocks, in DC they eat them for breakfast

The mood inside Trump Tower’s ornate atrium was subdued.

Something forlorn hung in the air, in stark contrast to the tower’s triumphant, if dated, opulence. The pink marble, the polished metal and the reflective glass contained only a handful of visitors, inattentively picking at sandwiches or idly window-shopping. Perhaps an impending snowstorm had emptied the tower’s assortment of cafes, shops and restaurants.

Then again, maybe the rifles and semi-automatic machine guns surrounding the building killed the buzz. It takes a lot to calm the frenzy of New York’s Fifth Avenue in mid-town. The NYPD Counter-Terrorism Unit – with an able assist from the Secret Service – made it look effortless.

The last time I had been in Trump Tower was more than 30 years ago. The smoked-glass skyscraper with the facade of an expensive whisky glass had just opened. New Yorkers, suburbanites and tourists thronged around the block for a glimpse inside at what was, at the time, the real estate equivalent of a Las Vegas showgirl. The entire concept of a multi-story atrium shopping centre, let alone one with an indoor waterfall and a zig-zag of cantilevered escalators, was previously the stuff of fantasy.

I’m not sure what I was expecting to see when I visited the building again. Now that Donald Trump was President of the United States, I thought the gawking mobs and souvenir hunters would be back. There was almost no one at the official Trump souvenir store, where shoppers were warned that all purchases are campaign contributions and, as such, had to be made by credit card. All buyers had to be US citizens. No cash, no Russians.

Across the street, the mood was much more vibrant. I was in New York for the launch of RiskMap 2018. For those of you unfamiliar with what that means, we were hosting clients and friends at the University Club, to give them our view of political and security risk for the coming year.

The University Club is everything Trump Tower is not. It’s one of those institutions of which membership is a definition of status. Its building is an imposing, Italian Renaissance behemoth sitting squarely at the corner of Fifth Avenue and 54th Street, and sitting even more squarely at the centre of the urban and urbane US Establishment. The facade of the Club, built in 1899 and listed in the US National Register of Historic Places, features carvings of Ivy League university crests.

Enough about the outside. We were on the inside, buoyed by an open bar and a well-lit ballroom. Over the course of an evening, we told our guests how we thought the world would spin in 2018. Prominent among other things, we touched on China, Syria, Brazil, terrorism and Brexit. Oh, and North Korea.

Mercifully, the bar reopened after the proceedings.

The Middle East topped New York’s list of concerns; questions poured forth from the crowd. President Trump had only just recognised Jerusalem as the capital of Israel; New York and the rest of the world waited for the pushback. As we spoke, the Iran nuclear deal was on Washington’s editing table; we briefly paused to see if there would be cuts, and how deep. What on earth is going on in Saudi Arabia (it’s under control), and will Qatar ever return to polite society in the Gulf (don’t hold your breath).

Control Risks sees regional conflicts, rather than the potential for global conflict, among the primary risks for 2018. When it comes to the Middle East, we were quite firm. Clients who called us with concerns about the likelihood and impact of military confrontation between Saudi Arabia and Iran were concerned about the wrong thing.

Those two regional powers will not – cannot – come into direct conflict in 2018 or, likely, beyond. But the tension between those two nations will underpin almost everything else that happens in the region. Pay particular attention to Hizbullah weapons factories in the south of Lebanon. They are building rockets powerful enough to strike anywhere within Israel.

Beyond the Middle East, Xi Jinping was the object of much curiosity. Was he the new Mao, the new Deng or was he someone entirely new, and powerfully, different? And more: Is it safe to do business in Mexico? Will NAFTA collapse? Will Canada revive TPP?

China was among the most interesting propositions. Since the collapse of the Soviet Union, the world has long wondered what would happen to traditional bi-polar geopolitics. At issue: what would China do?

We think we now have an idea. Among other things, China is now telling the developing world (and some of the developed world) that the Western, liberal model (multi-party democracy, open borders, free trade) is no longer the only game in town. “You can be like us!” China says, trumpeting its one-party system, large state-owned economy and carefully controlled private sector. In other words, you can keep a lid on things political and economic, yet still have a vast and growing middle class.

New York was its usual globalised self. Next stop: Washington, D.C., the world’s most inward-looking global capital. But first, more voyeurism – a quick detour to the Trump International Hotel, in Washington’s historic Old Post Office.

If Trump Tower was showing its age, the Trump International was all fresh, lustrous grandeur. There was a hush in the vast, ornate lobby (a central chandelier the size of a Cadillac must have dampened the sound). Piped in ambient music was the only thing you could hear. Even Fox News, on plasma screens framing the lobby bar, was toned down to take the edge off the shouting.

The crowd here – again a bit sparse on a mid-winter day – was eclectic. There were a few businessmen propped up over cocktails, looking slightly worse for the wear – shiny ties akimbo, French blue shirts open wide at white collars. There were some tourists who seemed to have wandered in from a fox hunt, all tweed, riding boots and elbow patches. There were a few people who looked like they just missed their flight back to Kazakhstan – President Nursultan Nazarbayev had just been in town for an official visit.

RiskMap in Washington was a brisk walk away. For the event in the capital, we decided a discussion of US politics would be surplus to requirements and added cyber security to the agenda.

That turned out to be an interesting move, as a panel on cyber threats drove home the reality that there is no such thing as an adequate defence against a cyber-attack. Sooner or later, every company will be hit, no matter how much time, effort and money they spend on hardware, software, training and awareness. (And no one, it seems, spends enough on the latter two.) The most modern measure of how companies handle the cyber threat is how resilient they are in the face of an attack.

The cyber landscape will grow more complex in 2018. This year’s high profile attacks will be more precise than before, with the capacity to target specific companies and specific elements of critical national infrastructure. But 2018 presents dual cyber challenges – the acute security threat is now twinned with a maze of global regulation on the collection, storage and transfer of data. Companies that focus on security run the risk of tripping over regulation. Companies that focus too much on compliance leave themselves vulnerable to hackers.

And that was all before lunch, so no bar. Washington takes its news over strong coffee and goes to work. RiskMap moved on to Tokyo.